Take a Breath, Pause, and Consider the Long Term

The Weekend Edition is pulled from the daily Stansberry Digest.


For the greater good, we hope Johnson & Johnson (JNJ) finds a way...

We're talking about Monday's news that the medical-goods manufacturer and the U.S. government have agreed on a $1 billion deal to increase the production of Johnson & Johnson's "lead coronavirus vaccine candidate."

As Stansberry NewsWire analyst Daniel Smoot wrote on Monday morning, citing a Reuters report...

Through the deal, JNJ said the vaccine could be ready for human trials by September. And by early 2021, the vaccine could be made available for emergency use.

Daniel also shared the following quote from Johnson & Johnson Chairman and CEO Alex Gorsky during his appearance on financial-news network CNBC that same day...

We have very good early indicators that not only can we depend on this to be a safe vaccine, but also one that will ultimately be effective based on all the early testing and modeling we've been doing.

This is a bit of a moonshot for J&J going forward, but it's one we feel is very, very important for us to be doing at this period in time.

The government will pay $421 million to Johnson & Johnson as part of the deal. And the company, which is not a major vaccine maker, said it plans to build a new production facility in the U.S.

Today, at least 70 potential COVID-19 tests, treatments, or vaccines are being studied by various companies, but we don't know if or when they will be safe or effective enough for public use.

So forgive us for thinking, "Too much, too late..."

On Monday, Stansberry Venture Technology editor Dave Lashmet told us in an e-mail...

We won't know if this [JNJ] vaccine works for a year... [It's] utterly untested. But dedicating manufacturing capability has to mean something.

This development is, of course, better than nothing. But if we're all still social-distancing a year from now... well, we don't want to think about it.

The problem is that "we" – as in the world – often easily forget...

Two coronaviruses similar to COVID-19 – severe acute respiratory syndrome ("SARS") and Middle East respiratory syndrome ("MERS") – first appeared in 2002 and 2012, respectively...

And like COVID-19, these diseases were also attributed to sick animals... with their infections making the jump to humans.

For lack of a better phrase, "bat viruses" have been known for a while. They've been around long enough that there's a so-called "Bat Woman" scientist in China who was able to discover the origins of COVID-19 in roughly a week back in early January.

The publication Scientific American shared the story recently...

The genomic sequence of the virus – now officially called SARS-CoV-2 because it is related to the SARS pathogen – was 96 percent identical to that of a coronavirus the researchers had identified in horseshoe bats...

But vaccines still don't exist for SARS or MERS because, as Dave told us, they took five years to develop and didn't advance because the diseases "burned out."

This reminds us how often we forget... and move on to the "next thing" too soon.

People can – and will – debate how various leaders have handled responding and preparing for this novel coronavirus... and if those decisions made things better or worse. But everything starts at the source...

And how costly forgetting about that can be – with more than 55,000 deaths worldwide, $2 trillion in Federal Reserve stimulus (and possibly more printing to come), a bear market, and everyday life basically turning upside down.

For these reasons and more, we'd be happy if COVID-19 burns out, too...

But even if it does, the best and cheapest way to prevent "this" from happening again is for companies like Johnson & Johnson to work on potential treatments even after the crisis – and this $1 billion deal with the government – goes away.

As the old saying goes, "Proper prevention prevents poor performance." Or in a quote attributed to Hall of Fame basketball coach John Wooden, "The true test of a man's character is what he does when no one is watching."

In other words, the best thing to do is never get in "this" situation to begin with.

The same can be said about investing...

But this is long-term thinking, of course, which is hard to do.

Longtime DailyWealth readers might be familiar with the countless studies that conclude the pain of losses outweighs the pleasure we humans feel about our wins...

With this in mind, how painful it must be for a business owner to deal with the fact that his billings went from around $60 million to $3.5 million in just the last few weeks... as one of our paid-up subscribers recently shared with us.

And at the same time, we received a note from another paid-up subscriber who ran his own 10-year "back test" on our founder Porter Stansberry's recent stock recommendations in our brand-new Stansberry's Forever Portfolio... and reported that most of the buys had triple-digit returns, including some as high as 600%-plus.

How's that for perspective?

This is exactly what Porter hoped to bring to readers with his list of "GOATs"...

That's short for the "Greatest Stocks of All Time," as he said during his free presentation last week.

We can't imagine the national-record fall into a bear market has been pleasant for many investors over the past few months...

But as Porter told viewers, if you can take a breath, pause, and consider the long term, it's clear the opportunities to invest – particularly in high-quality, capital-efficient companies – haven't been this good since the wake of the financial crisis last decade... or even way back in the era of the Great Depression.

Again, if you're a long-term investor, it's critical to think "big" picture...

History shows that what goes down, will come up... eventually. Today, Porter rightfully sees extraordinarily cheap prices in the market for some of the best companies in the world.

At the same time, we still likely haven't seen the bottom yet from all of this.

In any case, once the scope and duration of the virus's spread in the U.S. and prevention effectiveness become clearer, Porter explained, the market will start to come back.

And once that begins, Porter thinks the recovery could be quick... sending the major U.S. indexes to new highs before the end of the year... and his "forever" stocks soaring again.

We urge you to check out the replay of Porter's free event right here if you missed it.

When will everyday life truly return to what we used to know? We can't know for sure...

But we do know a reliable, though off-the-radar, indicator to look to for confirmation.

It's informally known as the "Waffle House Index" – and last week, it went "red." Anyone who has been in the South or works for the Federal Emergency Management Agency ("FEMA") might know what we're talking about...

FEMA actually uses Waffle House restaurants – and whether they're open, closed, or offering a limited menu – to gauge the severity of a disaster in local neighborhoods.

Usually, this is done in relation to a hurricane or tornado recovery. But in today's world, the number of Waffle House's 24-hour restaurants that are closed indicates the extent of the damage from the pandemic.

Former FEMA director Craig Fugate coined the term years ago. And as this 2011 article from trade publication EHS Today explained, the chain's stores have a reputation for being prepared for anything...

If a Waffle House store is open and offering a full menu, the index is green. If it is open but serving from a limited menu, it's yellow.

When the location has been forced to close, the index is red. Because Waffle House is well-prepared for disasters... it's rare for the index to hit red.

Last week on its social media pages, Waffle House posted this update with the hashtag #WaffleHouseIndexRed...

Remember, these stores have a reputation for never closing – yet today, a fifth of Waffle House stores are closed. And by March 18, some transitioned to serving to-go orders only.

With this informal indicator in the red, we have another sign that there's likely still a ways to go before the complete turnaround arrives.

But as long-term investors know, "this too shall pass"...

All the best,

Corey McLaughlin

Editor's note: The rapid decline in the state of our economy has given investors pause as they try to make sense of this "new normal."

To guide us through the unknown, Porter recently shared his take on the market... including when he thinks the bottom will hit. He even shared how to access his brand-new Forever Portfolio – a collection of high-quality, capital-efficient stocks that could be the surest way to protect and grow your money from here. If you missed Porter's critical update, click here to watch the replay.

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